IEA: Surging renewables to become dominant electricity source within three years
Renewables will dominate the growth of the world’s electricity supply over the next three years, according to the latest report from the International Energy Agency.
In its latest annual outlook report on electricity, the Paris-based climate agency predicts renewables will overtake coal as the leading source of electricity by 2025.
Alongside nuclear power, the IEA predicts that green energy will meet the vast majority of the global demand over the next three years, easing the risk of rising prices while lowering the power sector’s carbon emissions.
After slowing slightly last year to two per cent amid the turmoil of the global energy crisis and exceptional weather conditions, world electricity demand is expected to accelerate to rebound at an average of three per cent over the next three years.
Emerging and developing economies in Asia are the driving forces behind this faster pace, which is a step up from average growth of 2.4 per cent during the years before the pandemic.
The Western pivot to renewables means its share of the global power generation mix is forecast to rise from 29 per cent in 2022 to 35 per cent in 2025, with the shares of coal- and gas-fired generation falling.
More than 70 per cent of the increase in global electricity demand over the next three years is expected to come from China, India and Southeast Asia.
Meanwhile, advanced economies are seeking to expand electricity use to displace fossil fuels in sectors such as transport, heating and industry.
Weather will drive electricity demand for years to come
The report also suggests electricity demand and worldwide energy supplies are becoming increasingly weather dependent, exposing the need for faster decarbonisation and accelerated deployment of clean energy technologies.
The IEA argued that as the clean energy transition gathers pace, the impact of weather events on demand will intensify due to the increased electrification of heating while the share of weather-dependent renewables will continue to grow in the generation mix.
In such a world, the IEA argues that boosting the flexibility of power systems while ensuring security of supply and resilience of networks will be crucial.
Extreme conditions were a recurring theme last year.
Alongside drought in Europe, which contributed to nuclear outages in France and droughts at Norwegian hydroelectric dams, there were also heatwaves in India, resulting in the country’s highest ever peak in power demand.
Similarly, central and eastern regions of China were hit by heatwaves and drought, which caused demand for air conditioning to surge amid reduced hydropower generation in Sichuan province.
The US also saw severe winter storms in December, triggering massive power outages.
Net Zero goals challenged by CO2 emissions
The IEA also warned of challenges for developed economies targeting ambitious net zero goals and energy security.
After reaching an all-time high in 2022, carbon dioxide emissions from global power generation are set to remain around the same level through 2025.
As natural gas-fired power generation in the EU is forecast to fall in the coming years, significant growth in the Middle East is set to partly offset this decrease.
Expected declines in coal-fired generation in Europe and the Americas are also likely to be matched by a rise in the Asia-Pacific region, despite increases in nuclear power deployment and restarts of plants in some countries such as Japan.
IEA executive director Fatih Birol said: “The good news is that renewables and nuclear power are growing quickly enough to meet almost all this additional appetite, suggesting we are close to a tipping point for power sector emissions.
“Governments now need to enable low-emissions sources to grow even faster and drive down emissions so that the world can ensure secure electricity supplies while reaching climate goals.”